Effects on Grocery Stocks after Amazon Buys Whole Foods Market
I was surprised when I saw “news pending” message in Whole Food Market stock. I don’t have any idea why they halted their stock. Then I googled and got the answer. Amazon is willing to acquire Whole Foods Market. For 42$ per share, Amazon placed a value of approximately $13.7 Billion. Also, Amazon will pay the all the previous debt of Whole Foods Market.
Millions of people love Whole Foods Market as they provide the best organic foods and groceries that really well and fun to eat. This company is committed satisfying and nourishing real food lovers and customers for last four decades. There is no doubt about the quality and trust value of Whole Foods Markets among the customers.
After the deal was announced, it totally shook the stocks of traditional grocery shops and supermarkets. The top grocery stores like Kroger. It also damaged the stock structure of food companies like Hershey and Campbell Soup. E-commerce like Wal-Mart and Target are considered as the main competitor of Amazon also affected by this announcement.
Here is the state of the stock market of the grocery industry on June 16.
|Company/ Store Name||Percent of Increase/ decrease of per Share rate||Per Share rate|
|Smart and Final Stores||-18.19%||$9.10|
Amazon has little grocery business of its own. As you know they named it Amazon Fresh. The analysis of business expert shows that the main reasons for buying the Whole Foods Market are their competitor invested 3.3 billion on grocery section. To beat the competitor, Amazon quickly took this nice step.
Though Amazon will buy the Whole Foods Market their will be no major change in the structure in the company. Whole Food Market will store the produce with same Whole Foods Market Brand, not Amazon. The Vendors and partners of this company around the world will remain same. John Mackey will still retain the position of CEO of Whole Foods Market. The main headquarter will stay at the same place at Austin, Texas.
As high-tech octopus e-commerce like Amazon bought a grocery store, we expect a huge change in grocery stores. Traditional stores now have to high-tech oriented if they have to compete with Amazon.